United States v. Jabar ( 2021 )

17-3514 (L)
United States v. Jabar
1 In the
2 United States Court of Appeals
3 For the Second Circuit
4 ________
5
6 AUGUST TERM 2020
7
8 ARGUED: OCTOBER 14, 2020
9 DECIDED: NOVEMBER 19, 2021
10
11 Nos. 17-3514-cr (Lead), 18-1233-cr (XAP), 18-1857-cr (XAP)
12
13 UNITED STATES OF AMERICA,
14 Appellant-Cross-Appellee,
15
16 v.
17
18 STEVE S. JABAR, aka Steve Shariff, aka Satar Jabar, aka Kamal Jabar,
19 aka Kamal Jamel, DEBORAH BOWERS,
20 Defendants-Appellees-Cross-Appellants.
21 ________
22
23 On Appeal from the United States District Court
24 for the Western District of New York.
25 ________
26
27 Before: WALKER, SACK, * and MENASHI, Circuit Judges.
________
*
Circuit Judge Ralph K. Winter, originally a member of this panel,
died on December 8, 2020. Circuit Judge Robert D. Sack replaced Judge
Winter on the panel for this appeal. See 2d Cir. IOP E(b).
2 17-3514 (L)
The United States appeals from a post-verdict judgment of
acquittal entered by the District Court for the Western District of New
York (Lawrence J. Vilardo, J.) with respect to the convictions of
defendants Steve S. Jabar and Deborah Bowers for wire fraud, in
violation of 18 U.S.C. § 1343, and conspiracy to commit wire fraud, in
violation of 18 U.S.C. § 371. The government argues that a reasonable
jury could infer that the defendants had an intent to defraud the
United Nations when they diverted for personal use more than
$65,000 of grant money awarded to their non-profit organization.
Viewing the evidence in the light most favorable to the government,
we conclude that there was sufficient evidence for the jury to convict
on the wire fraud and related counts. Because the district court did
not reach defendants’ motion for a new trial on these counts, we
remand for it to consider the motion in the first instance.
Jabar and Bowers also cross-appeal the district court’s order
denying their motions for a judgment of acquittal or a new trial on
their convictions for making false statements, in violation of 18 U.S.C.
§ 1001. Viewing the evidence in the light most favorable to the
government, we conclude that there was sufficient evidence for the
jury to convict defendants for their false statements. We discern no
errors with respect to the false statement convictions that would
require a new trial.
Accordingly, we REVERSE the district court’s judgment of
acquittal on the wire fraud and wire fraud conspiracy counts;
AFFIRM the district court’s denial of a judgment of acquittal and a
3 17-3514 (L)
new trial on the false statement counts; and REMAND with
directions for the entry of judgment consistent with the foregoing and
for consideration of the motion for a new trial on the wire fraud and
wire fraud conspiracy counts.
________
Tiffany H. Lee, Assistant United States Attorney,
for James P. Kennedy, Jr., United States Attorney
for the Western District of New York, for Appellant-
Cross-Appellee.
Jamesa J. Drake, Drake Law, LLC, for Defendant-
Appellee-Cross-Appellant Steve S. Jabar.
Mark J. Mahoney (Jesse C. Pyle, on the brief),
Harrington & Mahoney, for Defendant-Appellee-
Cross-Appellant Deborah Bowers.
________
JOHN M. WALKER, JR., Circuit Judge:
The United States appeals from a post-verdict judgment of
acquittal entered by the District Court for the Western District of New
York (Lawrence J. Vilardo, J.) with respect to the convictions of
defendants Steve S. Jabar and Deborah Bowers for wire fraud, in
violation of 18 U.S.C. § 1343, and conspiracy to commit wire fraud, in
4 17-3514 (L)
violation of 18 U.S.C. § 371. The government argues that a reasonable
jury could infer that the defendants had an intent to defraud the
United Nations (UN) when they diverted for personal use more than
$65,000 of grant money awarded to their non-profit organization.
Viewing the evidence in the light most favorable to the government,
we conclude that there was sufficient evidence for the jury to convict
on the wire fraud and related counts. Because the district court did
not reach defendants’ motion for a new trial on these counts, we
remand for it to consider the motion in the first instance.
Jabar and Bowers also cross-appeal the district court’s order
denying their motions for a judgment of acquittal or a new trial on
their convictions for making false statements, in violation of 18 U.S.C.
§ 1001. Viewing the evidence in the light most favorable to the
government, we conclude that there was sufficient evidence for the
jury to convict defendants for their false statements. We discern no
errors with respect to the false statement convictions that would
require a new trial.
Accordingly, we REVERSE the district court’s judgment of
acquittal on the wire fraud and wire fraud conspiracy counts;
AFFIRM the district court’s denial of a judgment of acquittal and a
new trial on the false statement counts; and REMAND with
directions for the entry of judgment consistent with the foregoing and
for consideration of the motion for a new trial on the wire fraud and
wire fraud conspiracy counts.
5 17-3514 (L)
BACKGROUND
This case arises from defendants’ personal use of grant money
that the UN awarded to their non-profit organization, Opportunities
for Kids International, Inc. (OKI). Jabar and Bowers applied for and
obtained a grant in the amount of $500,000 ($150,000 of which was
later withheld) for the sole purpose of establishing a radio station in
Iraq dedicated to women’s programming. Instead, the defendants
siphoned off more than $65,000 of the grant to pay personal debts,
bills, and taxes.
The following background draws the facts from the trial
evidence and describes them in the light most favorable to the
government, as we must in reviewing a post-verdict motion for a
judgment of acquittal. 1 Unless otherwise noted, the parties do not
dispute the relevant facts.
The UN’s Grant Application Process
The UN is a well-known international organization of 193
member states based in New York City that engages in diplomatic
and donor-state-driven endeavors. The efficacy of the UN generally,
ever the subject of debate, has no bearing on this case. The United
Nations Development Fund for Women (UNIFEM) is a UN agency
that fosters gender equality, including by providing grants to non-
governmental organizations (NGOs). UNIFEM requires an NGO that
is interested in a grant to submit a proposal describing the project, the
1 United States v. Litwok, 678 F.3d 208, 210-11 (2d Cir. 2012).
6 17-3514 (L)
organization receiving the grant, and the projected budget. If the
project is approved, the NGO and UNIFEM enter into a standard
cooperation agreement that sets forth conditions governing the use
and management of the grant money.
UNIFEM grants are funded entirely through voluntary
donations by UN member states. As a condition for obtaining the
grant, UNIFEM requires grant recipients to maintain and submit
detailed records of their expenditures to show that the grant is being
spent in furtherance of UNIFEM’s mandate.
The Charged Fraudulent Scheme
In 1995, Jabar and Bowers originally founded OKI as a not-for-
profit organization to provide monetary, immigration, and
educational assistance to Kurdish refugees in upstate New York.
Bowers served as OKI’s Executive Director and Jabar served as its
Treasurer.
By 2003, Jabar had amassed hundreds of thousands of dollars
of personal debt. To ease his financial difficulties, in November 2003,
Jabar, with Bowers’s assistance, applied for a loan that would
consolidate $350,000 worth of mortgage payments, back taxes,
consumer debts, bank loans, and other debts. The loan was refused.
Thereafter, Jabar borrowed money from friends, including
approximately $45,000 from Bassam Bitar and $23,000 from Saad
Almizoori.
7 17-3514 (L)
In June 2004, Jabar and Bowers applied on behalf of OKI for a
UNIFEM grant to establish a radio station in Iraq named Voice of
Women (VOW), which would broadcast programming to educate
Iraqi women on democratic processes and increase civic engagement.
Jabar and Bowers initially requested $423,000 in seed money, before
increasing their request to $500,474. To substantiate the budget
request, they submitted a line-item budget that explained how each
dollar would be allocated towards the radio station.
On December 12 and 13, 2004, OKI and UNIFEM, respectively,
formalized the terms of the grant in a Project Cooperation Agreement
(Cooperation Agreement). The Cooperation Agreement’s preamble
pronounced, “UNIFEM has been entrusted by its donors with certain
resources that can be allocated for programmes and projects, and is
accountable to its donors and to its Executive Board for the proper
management of these funds.” 2 The Cooperation Agreement then set
forth detailed terms regulating the spending, recordkeeping, and
reporting of the grant funds.
UNIFEM would disburse the grant in multiple installments: an
initial disbursement of $350,000 and subsequent installments on a
quarterly basis. OKI was to use the funds “in strict accordance” with
a so-called Project Document, which purported to list the objectives
of the endeavor. 3 Expenditures were not to exceed a 20 percent
variation from any line item of the Project Budget unless OKI
2
Joint App’x 2087.
3 Joint App’x 2092, art. VIII, ¶ 2.
8 17-3514 (L)
obtained UNIFEM’s advance approval. OKI was required to return
to UNIFEM any funds not spent on the project within two months of
the termination of the agreement or completion of the project. The
government did not introduce either the Project Document or the
Project Budget into evidence at trial.
The Cooperation Agreement additionally imposed detailed
recordkeeping and reporting requirements. OKI agreed to maintain
accurate and updated records of all expenditures “to ensure that all
expenditures are in conformity with the provisions of the Project
Work Plan and Project Budgets.” 4 Such records were to include
original invoices, bills, and receipts. Every quarter, OKI was to
transmit to UNIFEM a financial report listing the disbursements
incurred on the project. Only if the financial report showed the
“satisfactory management and use of UNIFEM resources” would
UNIFEM release the remainder of the grant. 5 OKI also agreed to at
least one audit “on the status of funds advanced by UNIFEM” during
the project. 6
When Jabar signed the Cooperation Agreement on behalf of
OKI, OKI’s bank balance was $1,630.96. On December 15, OKI
received the initial $350,000 disbursement. The next day, Bowers
wrote a check for $20,000 to Bitar, one of Jabar’s friends who had
loaned him money for his personal expenses. One week later, on
4
Joint App’x 2092, art. IX, ¶ 1.
5
Joint App’x 2092, art. VIII, ¶ 1.
6 Joint App’x 2093, art. XI, ¶ 1.
9 17-3514 (L)
December 23, Bowers wired $10,000 to Almizoori, another friend of
Jabar’s who had loaned him money.
Over the next six months, Jabar and Bowers continued to
withdraw money from OKI’s grant-infused bank account for personal
use. On February 17, 2005, Bowers wired $1,500 to pay for a family
friend’s medication. On March 3, Bowers wrote herself $7,362.54
check to repay $8,000 that she had loaned Jabar. On April 14, Bowers
wrote Jabar a check for $7,219 bearing the memo “VOW Radio.” That
same day, she wrote a check from Jabar’s account for an identical sum
to pay his property taxes. On May 1, Bowers wrote a $5,600 check to
Jabar with the memo “general manager” and deposited it in his
personal account. She then used that money to pay his mortgage,
premiums, credit cards, utility bills, medical bills, and insurance. On
June 3, Bowers wired $10,000 from OKI’s account to Jabar’s personal
account to cover a prior $10,000 check Jabar had written to Bitar for
“payment/loan.” On June 8, Bowers transferred $15,000 from OKI’s
account to her personal account. On June 20, Bowers transferred
$4,200 from OKI’s account to Jabar’s personal account to pay loans,
credit cards, and utility bills. In total, the government asserted that
defendants withdrew more than $65,000 from the OKI account to pay
personal expenses.
On May 9, 2005, more than one month beyond the quarterly
report deadline, the defendants submitted a financial report showing
$357,259 in expenditures and receipts showing $362,918 in VOW-
related expenses. The report failed to account for numerous
expenditures made using the grant. It claimed that OKI made its first
10 17-3514 (L)
expenditure on January 1, 2005, even though Bowers had transferred
$20,000 to Bitar and $10,000 to Almizoori on December 15 and
December 23, 2004, respectively. The report did not disclose any of
the personal expenditure payments Jabar or Bowers made.
UNIFEM opened an investigation and audit over concerns that
OKI’s report showed unauthorized expenditures and inadequate
receipts. Based on the audit’s results, UNIFEM did not release the
remaining $150,000 of the grant. OKI ultimately built a radio station,
but the parties dispute whether it met the project specifications.
In June 2005, the Internal Revenue Service (IRS) received
multiple suspicious activity reports that flagged attempted transfers
from OKI’s bank account to bank accounts in the Middle East. The
IRS began an investigation led by Special Agent Michael Klimczak.
In July 2006, Agent Klimczak interviewed Bowers in her home
regarding the UN grant. Bowers initially told the agent that all
$350,000 went towards VOW. When Agent Klimczak showed her
copies of checks and wire transfers, however, she admitted the
personal use payments. As an example, she initially claimed that the
March 3, 2005 check for $7,219 went towards VOW but, upon being
confronted with certain records, she admitted that she withdrew that
grant money to pay Jabar’s property taxes.
In September 2006, Agent Klimczak interviewed Jabar. Jabar
initially told the agent that he had transferred all $350,000 to Iraq to
spend on VOW, save $10,000 set aside for legal and other expenses.
Upon being shown records of certain transactions, however, he
11 17-3514 (L)
admitted to repaying his personal debts with grant money. For
example, he admitted to transferring money to Bitar and Almizoori to
repay loans to renovate his properties, to pay property taxes, and to
make credit card payments. He conceded that “he knew that wasn’t
the way to operate” but he did not want to “embarrass himself”
before his friends. 7 He also admitted to using grant money “to keep
the IRS people off his back.” 8
As Agent Klimczak continued showing records of personal
expenditures from the OKI account, Jabar became upset. He stated,
“[S]orry, big mistake, I’m going to get crucified for that,” when shown
the $7,219 check bearing the false memo, “VOW Radio.” 9 He also
exclaimed, “[T]his is life, you borrow money, and you pay it back. I
needed the money. I didn’t care where it came from. I needed to pay
Bitar, bills, loans. I wasn’t making millions out of [the Department of
Homeland Security].” 10
Procedural History
On May 21, 2009, the grand jury returned a fourteen-count
indictment charging Jabar and Bowers with conspiracy to commit
wire fraud (Count 1), wire fraud (Counts 2-4), money laundering
(Counts 5-9), and false statements (Counts 10-14). At trial, the
government’s evidence included the Cooperation Agreement,
7
Joint App’x 2186.
8
Joint App’x 2176.
9 Joint App’x 2175-76.
10 Joint App’x 2191.
12 17-3514 (L)
records showing in excess of $65,000 in personal expenditures,
testimony by friends of Jabar concerning his debts, and testimony by
Agent Klimczak.
The defense produced accountant and expert witness Eric
Colca, who testified that OKI had spent $357,361 on the VOW project
by March 2005 and thus satisfied its obligation to spend $350,000 on
the radio station. Colca calculated OKI’s expenditures by totaling
four categories of transactions that he assumed, based on Jabar’s
representations, were related to VOW: (1) transfers from the OKI
account to a Jordanian bank account; (2) transfers from Jabar’s
personal account to the Jordanian account; (3) third-party loans for
which Jabar purportedly assumed responsibility; and (4) invoices and
receipts showing construction and operation expenses. From that
total, Colca subtracted withdrawals from OKI’s account that were
unrelated to the radio station to arrive at total VOW expenditures. On
cross-examination, Colca acknowledged that he did not conduct an
audit and thus assumed without confirming, for example, that all
$250,000 transferred from OKI’s account to the Jordanian account was
spent on the radio station. Colca also admitted to possibly double
counting certain expenditures.
Following the five-week trial, the jury returned guilty verdicts
against the defendants on wire fraud (Count 4), conspiracy to commit
wire fraud (Count 1), and making false statements (Count 14 for Jabar;
Counts 11-13 for Bowers). As to these counts, Jabar and Bowers
jointly moved for a judgment of acquittal pursuant to Federal Rule of
Criminal Procedure 29 and for a new trial pursuant to Federal Rule of
13 17-3514 (L)
Criminal Procedure 33. The district court granted a judgment of
acquittal on the wire fraud and conspiracy to commit wire fraud
counts, dismissed the new trial motion on the wire fraud and
conspiracy counts as moot, and upheld the false statement
convictions. 11 The district court imposed sentences of one day of time
served and fines of $500 as to both defendants. This appeal followed.
DISCUSSION
The government appeals from the judgment of acquittal on the
wire fraud and related counts. The government argues that the
district court erred by concluding that there was insufficient evidence
of fraudulent intent. As to those counts, Jabar and Bowers argue that
the district court correctly entered the judgment of acquittal and, in
the alternative, that a new trial is warranted based on various
evidentiary rulings and the jury instructions. On cross-appeal, Jabar
and Bowers challenge the district court’s denial of their motions for a
judgment of acquittal or a new trial on the false statement counts.
11
United States v. Jabar, No. 09-CR-170, 2017 WL 4276652, at *1
(W.D.N.Y. Sept. 27, 2017).
14 17-3514 (L)
I. Wire Fraud and Conspiracy to Commit Wire Fraud
A. Sufficiency of the Evidence
We review de novo the district court’s grant of a motion for a
judgment of acquittal under Rule 29. 12 Only if “the evidence that the
defendant committed the crime alleged is nonexistent or so meager
that no reasonable jury could find guilt beyond a reasonable doubt”
may the court enter a judgment of acquittal. 13 “[W]e must view the
evidence in the light most favorable to the government, crediting
every inference that could have been drawn in the government’s
favor, and deferring to the jury’s assessment of witness credibility and
its assessment of the weight of the evidence.” 14 Here, the defendant
“faces a heavy burden.” 15 As long as the evidence “[would] suffice to
convince any rational trier of fact that the crime charged has been
proven beyond a reasonable doubt, then the conviction must stand.” 16
In reviewing the evidence on a motion for a judgment of
acquittal, the court must be careful not to usurp the role of the jury.
“Rule 29[] does not provide the trial court with an opportunity to
substitute its own determination of . . . the weight of the evidence and
12
United States v. Truman, 688 F.3d 129, 139 (2d Cir. 2012).
13
United States v. Guadagna, 183 F.3d 122, 130 (2d Cir. 1999).
14 United States v. Martoma, 894 F.3d 64, 72 (2d Cir. 2017) (quotation
marks omitted).
15 United States v. Novak, 443 F.3d 150, 157 (2d Cir. 2006) (quotation
marks omitted).
16 United States v. D’Amato, 39 F.3d 1249, 1256 (2d Cir. 1994).
15 17-3514 (L)
the reasonable inferences to be drawn for that of the jury.” 17 Thus,
where “either of the two results, a reasonable doubt or no reasonable
doubt, is fairly possible, [the court] must let the jury decide the
matter.” 18
The elements of wire fraud are: “(1) a scheme to defraud, (2)
money or property as the object of the scheme, and (3) use of the wires
to further the scheme.” 19 Conspiracy to commit wire fraud requires
merely the agreement between defendants to engage in the foregoing
and an overt act by one of the conspirators in furtherance of the
conspiracy. 20
“Essential to a scheme to defraud is fraudulent intent.” 21
Fraudulent intent may be inferred “[w]hen the ‘necessary result’ of
the actor’s scheme is to injure others.” 22 Intent may also be proven
“through circumstantial evidence, including by showing that
defendant made misrepresentations to the victim(s) with knowledge
that the statements were false.” 23 Because an intent to deceive alone
is insufficient to sustain a wire fraud conviction,
“[m]isrepresentations amounting only to a deceit . . . must be coupled
17
Guadagna, 183 F.3d at 129 (quotation marks omitted).
18
Id.
19 United States v. Binday, 804 F.3d 558, 569 (2d Cir. 2015); see 18 U.S.C.
§ 1343.
20 18 U.S.C. § 371.
21 D’Amato, 39 F.3d at 1257.
22 Id. (quoting United States v. Regent Office Supply Co., 421 F.2d 1174,
1181 (2d Cir. 1970)).
23 Guadagna, 183 F.3d at 129.
16 17-3514 (L)
with a contemplated harm to the victim.” 24 “Such harm is apparent
where there exists a discrepancy between benefits reasonably
anticipated because of the misleading representations and the actual
benefits which the defendant delivered, or intended to deliver.”25
Proof of actual injury to the victim is not required because the scheme
need not have been successful or completed. 26
Comparing two of our previous decisions clarifies that the
misrepresentations must be central, not just collateral, to the bargain
between the defendant and the victim. In United States v. Starr,
owners of a bulk mailing company schemed to conceal higher rate
mailings from customers in lower rate bulk mailings without paying
the additional postage to the postal service or refunding their
customers’ excess postage payments. 27 Defendants “represented that
funds deposited with them would be used only to pay for their
customers’ postage fees,” but upon defrauding the postal service,
defendants sent fraudulent receipts to their customers and
appropriated the remainder of the funds for their own use. 28 We
concluded that because the customers’ mail was delivered on time to
the correct location, whatever harm there was did not “affect the very
nature of the bargain itself.” 29 At most, the government’s evidence
24
United States v. Starr, 816 F.2d 94, 98 (2d Cir. 1987).
25
Id. (quotation marks omitted).
26 United States v. Dinome, 86 F.3d 277, 283 (2d Cir. 1996).
27 816 F.2d at 95.
28 Id. at 99.
29 Id. at 98.
17 17-3514 (L)
showed defendants’ intent to deceive or induce customers into the
transaction but not a fraudulent intent. 30
In United States v. Schwartz the defendants schemed to purchase
U.S.-manufactured military equipment for their international
clients. 31 One producer, Litton Industries, “expressly demanded
assurances” that its devices would not be exported unlawfully,
including that: the condition be incorporated into the sales
agreement, the defendants disclose the customer’s identity, and the
customer obtain the requisite export certificates. 32 Rather than
comply, the defendants fed Litton false information and fabricated
documents to secure the purchase. 33 On appeal, we concluded that
evidence of the defendants’ deceitful acts supported a finding of
fraudulent intent and thus upheld the wire fraud convictions. We
distinguished these facts from the false representations in Starr, which
“did not cause any discrepancy between benefits reasonably
anticipated and actual benefits received” and, therefore, “did not go
to an essential element of the bargain.” 34 The scheme in Starr “only
defeated [defendants’] customers’ expectation that the money they
paid to the defendants would be fully used to pay for postage, an
expectation that was not the basis of the bargain.” 35 To the contrary, the
defendants’ misrepresentations in Schwartz were not “simply
30
Id. at 100.
31
924 F.2d 410, 414 (2d Cir. 1991).
32 Id. at 421.
33 Id.
34 Id. at 420.
35 Id. (emphasis added).
18 17-3514 (L)
fraudulent inducements,” but went to an essential element of the
bargain: the lawful export of military equipment. 36 The defendants
made “explicit promises . . . in response to Litton’s demands” and
evidence showed that the deceived party “would not have sold its
product” to defendants if they “had not been able to guarantee these
conditions.” 37 Therefore, even though it received payment, Litton
was deprived of “the right to define the terms for the sale of its
property” and “good will because equipment [that] Litton, a
government contractor, sold was exported illegally.” 38 The wire
fraud statute captured these non-pecuniary harms. 39
Bearing these principles in mind, we consider the nature of the
instant transaction between the parties and the government’s
evidence of fraudulent intent.
i. Nature of the Transaction Between the Parties
The district court ultimately concluded that the evidence was
insufficient to prove that the defendants had the intent to defraud the
UN because ultimately, they built “$350,000 worth of a radio
station.” 40 In reaching this decision, the district court rejected the
notion that a reasonable jury could find Jabar and Bowers’s use of
36
Id. at 421.
37
Id. at 420-21.
38 Id. at 421.
39 Id.; see also United States v. Peroco, 13 F.4th 158, 172 (2d Cir. 2021)
(depriving a party of an “essential element of the bargain . . . is plainly
sufficient for a wire fraud conviction under our caselaw”).
40 Jabar, 2017 WL 4276652, at *5.
19 17-3514 (L)
grant funds for personal expenses was itself a harm to the UN. 41 We
do not agree that the evidence compels a finding that the benefit of
the bargain to UNIFEM was confined to a brick-and-mortar radio
station. The evidence was sufficient for the jury to determine
reasonably that OKI’s representation in the Cooperation Agreement
that it would spend the grant funds pursuant to UNIFEM’s
specifications was equally essential to the issuance of the grant.
The Cooperation Agreement required compliance with
numerous spending provisions that controlled OKI’s use of the
$500,000. OKI agreed to “utilize the funds . . . provided by UNIFEM
in strict accordance with the Project Document.” 42 Although the
government failed to offer the Project Document and Project Budget
into evidence, a reasonable jury could rely on other evidence that was
offered to infer that a restriction on the use of grant funds was part of
the basis of the bargain. The defendants’ own budget proposal,
received in evidence, unsurprisingly stated that every dollar of the
grant proceeds would be allocated to a VOW-related expense. And a
UNIFEM official testified that the agency as a matter of course
demands assurances from grant recipients that they will devote the
awarded money exclusively towards the project. The Cooperation
Agreement also required that Jabar and Bowers return to UNIFEM
41
Id. at *6 (recognizing that evidence “may have been sufficient to
show that the defendants intended to use UN money dollar-for-dollar not
on the radio station but on personal expenses,” but determining this was
distinct from “intending to harm the UN by not giving the UN the benefit
of its bargain”).
42 Joint App’x 2092, art. VIII, ¶ 2.
20 17-3514 (L)
any funds not spent on the project. UNIFEM mandated the return of
all unused funds precisely because the proper use and management
of funds was central to the bargain.
The Cooperation Agreement contained exhaustive accounting
requirements that also demonstrate that OKI’s proper spending of the
grant was essential to the bargain. The agreement required OKI to
“keep accurate and up-to-date records and documents in respect of
all expenditures” 43 and maintain “original invoices, bills, and
receipts.” 44 UNIFEM explained the purpose of the records clearly: so
that UNIFEM could “ensure that all expenditures are in conformity
with the provisions of the Project Work Plan and Project Budgets.”45
Moreover, OKI was required to disclose all income and expenditures
in financial reports, “[t]he purpose of [which was] to request a
quarterly advance of funds.” 46 UNIFEM would disburse each
subsequent grant installment only upon determining that the report
“show[ed] satisfactory management and proper use of UNIFEM
resources.” 47 As in Schwartz, UNIFEM “made explicit” these
requirements by “expressly demand[ing] assurances from” the
defendants in the terms of the Cooperation Agreement. 48
43
Joint App’x 2092, art. IX, ¶ 1; see also Joint App’x 2091, art. VII, ¶ 7
(“[OKI] shall maintain complete and accurate records of equipment,
supplies and other property purchased with UNIFEM funds.”).
44 Joint App’x 2092, art. IX, ¶ 1
45 Id.
46 Joint App’x 2093, art. X, ¶ 2(b).
47 Joint App’x 2092, art. VIII, ¶ 1.
48 Schwartz, 924 F.2d at 420-21.
21 17-3514 (L)
The spending and accounting conditions are reinforced by the
Cooperation Agreement’s precatory language describing UNIFEM’S
duty and accountability to its donors and testimony from a UNIFEM
official. Because grants are funded exclusively by donor countries, a
UNIFEM official made clear that “there has to be assurance,
continuous assurance available with the [UN] that the money is being
spent for the purpose for which it has been given . . . .” 49
In sum, the government’s theory at trial was that the
construction of the radio station was only part of the bargain and that
it served to conceal defendants’ fraudulent acts with respect to the
rest of the bargain 50—OKI’s agreement to spend the entirety of the
grant exclusively pursuant to the terms of the Cooperation
Agreement. To the extent defendants insisted that the contractual
bargain was confined to building the radio station, the jury was free
to reject that claim based on its assessment of the weight of the
evidence and reasonable inferences it could draw from that evidence.
49
Joint App’x 176-77.
50
The indictment charged: “in order to conceal and promote their
criminal conspiracy and wire fraud scheme, the defendants undertook
certain measures designed to demonstrate apparent compliance with the UNIFEM
Agreement, including . . . establishing ‘Voice of Women Radio.’” Joint App’x 65
(emphasis added). The bargain, as set forth in the indictment, was “that all
[grant] money would be acquired and used by . . . OKI for the purpose of
establishing and running a radio station,” pursuant “to the terms and
conditions set forth in the UNIFEM Agreement.” Joint App’x 64-65.
22 17-3514 (L)
ii. Evidence of Jabar and Bowers’s Fraudulent Intent
The district court concluded that the government’s proof at
most showed that Jabar and Bowers comingled the UN grant with
their personal funds because they used “other fungible dollars to
build the radio station for which the UN money was given.” 51 We
disagree. Based on the record, we conclude that there was sufficient
evidence to support the government’s theory of fraudulent intent:
that from the outset the defendants never intended to use the entirety
of the $500,000 grant or the $350,000 that they actually received on
VOW, but rather they intended to divert a portion for their personal
use, either as “free money” or as a loan.
Viewing the evidence in the light most favorable to the
government, we conclude a reasonable jury could find that the
necessary result of a scheme to take the grant money for personal use
would harm the UN. By diverting a portion of the grant for purposes
not authorized under the Cooperation Agreement and unrelated to
VOW, the scheme would necessarily deprive UNIFEM of money or
property while also depriving it of the proper management and
documentation of contributions entrusted by donor countries to
UNIFEM’s care.
The evidence from which the jury could infer a fraudulent
intent included: (1) bank records showing that Jabar and Bowers
withdrew and transferred more than $65,000 from the OKI bank
account for personal use; (2) Jabar’s financial motive to defraud the
51 Jabar, 2017 WL 4276652, at *6.
23 17-3514 (L)
UN; (3) the defendants’ immediate use of the grant money to repay
Jabar’s debts; (4) Jabar’s statement to Agent Klimczak that he needed
money; and (5) the defendants’ initial false statements to Agent
Klimczak that they spent the grant only on the project.
First, the government introduced bank records showing that
Jabar and Bowers diverted more than $65,000 from the OKI bank
account for their personal use. The evidence that the defendants
made these unauthorized expenditures from the grant supports a
strong inference that they intended to harm the UN by depriving it of
the right to define the terms for use of grant funds. None of these
funds independently came from OKI because OKI started with a
negligible bank balance of only $1,630.96 prior to receiving the grant
funds.
Second, the evidence demonstrated Jabar’s motive to get easy
cash, and quickly. His friends testified that he owed them tens of
thousands of dollars. Bitar confirmed that, when Jabar and Bowers
applied for the grant, Jabar “was in a bad financial situation” 52 and
had asked to borrow money with such frequency—“two, three times
a month”—that Bitar began recording the loans. 53 The jury could also
consider Jabar’s unsuccessful personal loan application, which the
mortgage broker declined to even submit to potential lenders. The
timing of the application process–shortly before the defendants
52
Joint App’x 369.
53 Joint App’x 370.
24 17-3514 (L)
sought the UN grant–further supports Jabar’s urgency for financial
relief.
Third, Jabar, with Bowers’s assistance, used the grant money to
pay back his creditor friends immediately in December 2004, a fact
that they concealed from UNIFEM. One day after the initial
installment was credited to OKI’s bank account, Bowers withdrew
$20,000 to repay Bitar. One week later, she transferred $10,000 to
repay Almizoori. A reasonable jury could view the timing and the
nature of these transactions, when considered alongside the motive
evidence, as revealing the defendants’ true aim in obtaining the grant,
as the government contended.
Fourth, Jabar admitted that his financial difficulties drove him
to use the UN-issued funds for personal purposes. In explaining
those personal expenditures to Agent Klimczak, he stated, “[T]his is
life, you borrow money, and you pay it back. I needed the money. I
didn’t care where it came from. I needed to pay Bitar, bills, loans. I
wasn’t making millions out of DHS.” 54 That statement could
reasonably be understood by the jury to reveal Jabar’s intentions
when he applied for and received the grant: the grant was a solution
to his mounting indebtedness. 55
Joint App’x 2191.
54
The district court reached the same conclusion regarding this
55
statement. See Jabar, 2017 WL 4276652, at *7 (describing statement as
evidence that defendants “intended to use UN grant money and other
25 17-3514 (L)
Fifth, the defendants’ false statements support the inference
that they understood their conduct to deprive the UN of benefits that
it anticipated. Bowers wrote “VOW Radio” in the memo line of a
check, even though she used the money to pay Jabar’s property taxes;
and Bowers and Jabar lied to Agent Klimczak that the entire grant
was spent on OKI only to admit to the contrary after being confronted
with the records. These misrepresentations when coupled with
intended harm to UNIFEM were sufficient to allow the jury to find
fraudulent intent.
Jabar and Bowers do not dispute that they took UN dollars in
the OKI account to fund personal expenditures. Rather, they argue
that the government failed to carry its burden to disprove that they
may have made VOW-related transactions using other banks
accounts. This reasoning suffers from three flaws: it elides the
distinction between an intent to harm and actual harm; it asks the
court to review the evidence in the light most favorable to the
defense—the inverse of the standard of review on a Rule 29 motion;
and—once “harm” is properly understood—the concession that they
personally used funds in the OKI account is itself an admission of
harm.
dollars to pay back Jabar’s personal debts”). However, the district court
wrongly determined that no reasonable jury could find that evidence of
Jabar and Bowers’s intent to violate the agreement in this manner
supported a finding of fraudulent intent.
26 17-3514 (L)
First, we emphasize that intent to defraud, an essential element
of wire fraud, includes contemplated harm. 56 The government was not
required to prove that Jabar and Bowers actually harmed the UN by
failing to replace money that they diverted from the grant or by failing
to build a radio station.
Second, “it is the task of the jury, not the court, to choose among
competing inferences that can be drawn from the evidence” and to
assess the weight of the evidence. 57 On a motion for a judgment of
acquittal pursuant to Rule 29, the court must view the case in the light
most favorable to the government and defer to the jury’s assessment
of the evidence and its reasonable inferences drawn from that
evidence.
Applying that deferential standard, we emphasize that the jury
was not required to accept either the defendants’ expert testimony
that defendants spent more than $350,000 on the project by the end of
March 2005 or the veracity of OKI’s quarterly financial report. And
there were many reasons why a jury might discount or reject that
evidence. The government on cross-examination elicited several
flaws in the methodology that defendants’ expert witness Colca used.
Colca did not conduct an audit. Instead, he “accepted the
representations of Mr. Jabar regarding monies that he spent on the
56
See Peroco, 13 F.4th at 176 (collecting cases).
57
United States v. Persico, 645 F.3d 85, 104 (2d Cir. 2011) (quoting
Jackson, 335 F.3d at 180).
27 17-3514 (L)
radio station.” 58 Similarly, Colca assumed, without confirming, that
$250,000 transferred from OKI’s bank account to the Jordanian bank
account was for VOW-related expenditures. 59 He also acknowledged
that his methodology, which separately tallied transfers to the
Jordanian account, third-party loans, and invoices and receipts, could
result in double counting radio-associated expenditures. Finally,
Colca did not confirm that the invoices and receipts were paid.
Presented with the above evidence, it was not unreasonable for the
jury to discount Colca’s testimony or reject it altogether.
The jury also was entitled to discount OKI’s quarterly financial
report, which showed $357,259 in expenditures, and receipts totaling
$362,918. The jury heard testimony that the report appeared to reflect
unauthorized expenditures and lack adequate receipts. Moreover,
after an investigation and audit following the report, UNIFEM
refused to disburse the rest of the grant. A reasonable jury could
certainly infer that OKI’s report and receipts were fatally defective
and that the misrepresentations the report contained, together with
evidence of contemplated harm to the UN, could support a finding of
fraudulent intent.
Third, in making their counterarguments, Jabar and Bowers do
not dispute that they took UN dollars in the OKI account to fund
personal expenditures. In doing so, they seem wrongly to presume
that those actions themselves did not cause harm to the UN. Jabar
58
Joint App’x 1605.
59
Joint App’x 1595 (“[W]e assumed that once it got to that account,
that it was going to the radio station. That’s as far as we could trace it.”).
28 17-3514 (L)
and Bowers ignore the possibility that restrictions on the use of funds
were an essential element of their bargain with the UN, such that their
intentional use of UN dollars on personal expenditure would harm
the UN even if they paid back every penny and followed through on
other aspects of the agreements.
For the above reasons, we conclude that the evidence was
sufficient for a jury to find guilt beyond a reasonable doubt on the
wire fraud and related conspiracy counts. 60
B. Motion for a New Trial
Federal Rule of Criminal Procedure 29(d) directs the district
court, upon entering a judgment of acquittal after a guilty verdict, to
“conditionally determine whether any motion for a new trial should
also be granted if the judgment of acquittal is vacated or reversed,”
and to “specify the reasons for that determination.” 61 A conditional
ruling on a motion for a new trial enables the appeals court to review
60
The theory that the UN was deprived of the benefit of the bargain
was charged in the indictment, presented to the jury, and responded to by
the defense. The closely related theory that the UN was denied the “right
to control” its assets because defendants misrepresented “potentially
valuable economic information” was not explicitly articulated at trial.
United States v. Lebedev, 932 F.3d 40, 48 (2d Cir. 2019). That the jury was not
charged on a right to control theory does not alter our conclusions. That is
because liability under either theory turns on the materiality of the
misrepresentations and requires us to consider whether the alleged
deception “affect[ed] the very nature of the bargain.” United States v.
Johnson, 945 F.3d 606, 612 (2d Cir. 2019), cert. denied, 141 S. Ct. 687 (2020).
61 Fed. R. Crim. P. 29(d)(1).
29 17-3514 (L)
efficiently the judgment of acquittal and the decision on a new trial
“in a single, consolidated appeal.” 62
After the jury verdict, Jabar and Bowers timely moved for both
a judgment of acquittal and a new trial. Upon granting judgment of
acquittal on the fraud and conspiracy convictions, however, the
district court did not issue a conditional ruling on the defendants’
motion for a new trial in accordance with Rule 29(d). 63 Neither party
on appeal challenges the district court’s failure to enter the
conditional ruling under Rule 29(d), but the motion for a new trial
was made below, and given our disposition, is no longer moot.
Consideration of a motion for a new trial is a matter best reserved to
the district court’s informed discretion. 64 Accordingly, we remand to
the district court for its determination of defendants’ motion for a new
trial. We express no opinion on whether the motion should be
granted or denied.
62
Richard Sauber & Michael Waldman, Unlimited Power: Rule 29(a)
and the Unreviewability of Directed Judgments of Acquittal, 44 Am. U. L.
Rev. 433, 438 (1994).
63 The district court mistakenly concluded that, “[b]ecause the fraud
and conspiracy counts have been dismissed, the defendants’ motion for a
new trial on those counts is moot.” Jabar, 2017 WL 4276652, at *13 n.13.
64 See United States v. Archer, 977 F.3d 181, 187 (2d Cir. 2020); United
States v. Millender, 970 F.3d 523, 531-32 (4th Cir. 2020) (remanding for
district court to consider whether to grant a new trial and to “specifically
explain the rationale for the decision”).
30 17-3514 (L)
II. False Statements
A. Motion to Suppress Jabar’s Statements to the IRS
Jabar challenges the district court’s failure to suppress
statements that he made during his interview with Agent Klimczak
on the basis that it was a custodial interrogation that trigged
safeguards under Miranda v. Arizona, which were not provided. 65 The
district court determined to the contrary that Jabar was not in
custody. “We review the district court’s factual findings on the
existence of a custodial interrogation for clear error, and its legal
conclusions de novo.” 66 To determine if a person was in custody, we
first focus on whether the person was “free to leave.” 67 We next
consider whether “a reasonable person would have understood his
freedom of action to have been curtailed to a degree associated with
formal arrest.” 68 “Relevant considerations include: (1) the
interrogation’s duration; (2) its location (e.g., at the suspect’s home, in
public, in a police station, or at the border); (3) whether the suspect
volunteered for the interview; (4) whether the officers used restraints;
(5) whether weapons were present and especially whether they were
drawn; and (6) whether officers told the suspect he was free to leave
or under suspicion.” 69
65
384 U.S. 436 (1966).
66
United States v. Familetti, 878 F.3d 53, 57 (2d Cir. 2017).
67 United States v. Newton, 369 F.3d 659, 672 (2d Cir. 2004).
68 Id.
69 United States v. Faux, 828 F.3d 130, 135 (2d Cir. 2016) (quotation
marks omitted).
31 17-3514 (L)
We are satisfied that Jabar was not in custody. At the time of
the interview, Jabar worked at DHS in Baghdad, and Agent Klimczak
coordinated his videoconference interview through a Baghdad-based
Federal Bureau of Investigations (FBI) officer. The FBI agent
requested, but did not require, Jabar to attend, and he escorted Jabar
to the interview without the use of any restraints, weapons, or force.
Because the interview took place in the Baghdad Operations Center
(BOC), a secure FBI facility, Jabar’s movement within the BOC
premises was necessarily restricted due to general security needs.
Jabar does not contend, however, that he was prevented from leaving
the interview. There is no suggestion that, at any point, Jabar
attempted to terminate the interview or was prevented from doing so.
Also, he was informed that he could take a break at any time and was
offered refreshments. We believe these facts would not lead a
reasonable person in Jabar’s position to conclude that he was in
custody. We thus affirm the district court’s order denying the motion
to suppress.
B. Sufficiency of the Evidence
Bowers appeals her convictions for falsely stating to Agent
Klimczak that she made three transactions to further the radio station
project: (1) the April 14, 2005 check to Jabar for $7,219 bearing the
memo, “VOW Radio”; (2) a $10,000 wire transfer to Jabar’s personal
account; and (3) the $4,200 wire transfer on June 20, 2005 to Jabar’s
personal account. She contends that the statements were not material
and that the government failed to establish that she intended to
deceive Agent Klimczak. Jabar challenges his conviction for falsely
32 17-3514 (L)
stating to Agent Klimczak that the entire grant was transferred to Iraq
for the purpose of the radio station on the grounds that his statement
was not material.
To prove a false statement under 18 U.S.C. § 1001, the
government must show that the defendant: “(i) knowingly and
willfully, (ii) made a statement, (iii) in relation to a matter within the
jurisdiction of a department or agency of the United States, (iv) with
knowledge that it was false or fictitious and fraudulent.” 70 A
statement is material under § 1001 “if it has a natural tendency to
influence, or [is] capable of influencing, the decision of the
decisionmaking body to which it was addressed, or if it is capable of
distracting government investigators’ attention away from a critical
matter.” 71
We find no merit to the defendants’ claim that their statements
were not material because Agent Klimczak already knew the answers
to his questions, and he testified that their responses would not have
changed his investigation. The jury could reasonably conclude that
Jabar’s and Bowers’s explanation for whether they properly used the
grant was “capable of influencing” the investigation, which is all that
was required. 72
70
United States v. Banki, 685 F.3d 99, 117 (2d Cir. 2012), as amended
(Feb. 22, 2012) (quoting United States v. Wiener, 96 F.3d 35, 37 (2d Cir. 1996)).
71 United States v. Adekanbi, 675 F.3d 178, 182 (2d Cir. 2012) (quotation
marks omitted).
72 Id.
33 17-3514 (L)
Bowers also argues that she did not have an intent to deceive
because she was cooperative, misremembered the transactions, and
corrected herself when informed of inaccuracies in her responses to
Agent Klimczak. We easily conclude that these fact issues fall within
the purview of the jury, 73 which was free to reject or discount her
argument at trial. Finally, that Bowers subsequently admitted to each
false statement is not a basis for setting aside the jury’s verdict,
because “there is no safe harbor for recantation or correction of a prior
false statement that violates section 1001.” 74 For the above reasons,
we conclude that there was sufficient evidence for the jury to convict
defendants for their false statements.
CONCLUSION
For the foregoing reasons, we REVERSE the district court’s
judgment of acquittal on the wire fraud and wire fraud conspiracy
counts, AFFIRM the district court’s denial of a judgment of acquittal
and a new trial on the false statement counts, and REMAND with
directions for the entry of judgment consistent with the foregoing and
for consideration of defendants’ motion for a new trial on the wire
fraud and wire fraud conspiracy counts.
73
United States v. Coppola, 671 F.3d 220, 239 (2d Cir. 2012) (“[T]he task
of choosing among permissible competing inferences is for the jury, not a
reviewing court.”).
74 United States v. Stewart, 433 F.3d 273, 318 (2d Cir. 2006).